Defective passage plan rendered vessel unseaworthy

Defective passage plan rendered vessel unseaworthy

in International Shipping News,Shipping Law News 04/05/2019

In a recent judgment, in the context of a claim by Owners for a contribution in General Average (GA), the Court considered whether a defective passage plan, prepared prior to the commencement of the voyage, rendered the Vessel unseaworthy. On the facts, it was found that that even though the Owners had in place good safety management practices, the Vessel was unseaworthy on the basis that a prudent owner would not have sent the Vessel to sea with such a defective plan, and that due diligence had not been exercised.

The background facts

On 17 May, 2011, the container vessel, CMA CGM Libra (the Vessel), grounded shortly after leaving the Port of Xiamen in China.

At the time, the Vessel was about four cables west of the buoyed fairway, in an area where the charted depth was over 30 metres. The fairway through which the Vessel was navigating prior to the grounding was bordered by areas marked on the chart as “Former Mined Areas”, the presence of which were noted in the chart notes and Admiralty Sailing Directions as having inhibited hydrographic surveying and, therefore, potentially containing uncharted wrecks and isolated shoals that posed a danger to deep-drafted vessels. Furthermore, a Notice to Mariners issued just five months prior to the grounding advised mariners that “numerous depths less than the charted exist within, and in the approaches to Xiamen Gang”. It also noted that the fairway had a depth of at least 14 metres. A further Notice to Mariners issued in April 2011 also gave specific examples of depths of water outside the fairway being observed to be considerably less than the charted depth.

Prior to departure, as required by the Owners’ Safety Management Systems (SMS), a passage plan had been prepared by the Second Officer and approved by the Master. Although some non-causative defects were noted on the plan, the fact that the Notice to Mariners identified the existence of shallower depths than those charted in the vicinity of the fairway which were not included on the plan meant that the Judge held that the passage plan was defective: a source of danger was not clearly marked as it ought to have been. In addition, although the Vessel had on board a memorandum issued by the Owners relating to the difficulties in navigating the waters around Xiamen, the passage plan did not mark or identify any “no-go” areas outside the buoyed channel. In the event, the Master decided to depart from the passage plan to navigate outside the buoyed channel; a decision which, on the facts, was found to be negligent.

The Owners claimed some $13m in GA. While 92% of the cargo interests paid their contribution in GA, the remaining 8% refused to do so and so the sum claimed in these proceedings amounted to approximately $800,000. While the Owners said that the cause of the grounding was an uncharted shoal, the cargo interests claimed that the inadequacy of the Vessel’s passage plan rendered the Vessel unseaworthy, due diligence had not been exercised, and that, as a result of the unseaworthiness, the Master’s navigation was negligent and the grounding caused by the Owners’ actionable fault.

The Admiralty Court decision

As a preliminary point, the Judge considered the recent decision of the Supreme Court in Volcafe Ltd. V. Cia Sud Americana de Vapores SA [2018] 3 WLR 2087 in relation to the burden of proof. The Supreme Court held in that case that the carrier had the burden of proving that there had been no breach of its obligations under Article III r.2 of the Hague Rules to properly and carefully load, carry and care for the cargo or that the damage had been caused by one of the exceptions. The cargo interests argued that the Owners had the burden of proving that the Vessel was seaworthy under Article III r. 1 or, if it was not, that due diligence had been exercised.

However, the Volcafe decision was distinguished as only being relevant to the burden under Article III r. 2. The Judge held that the conventional view, that under Article III r. 1 the burden lay on cargo interests to establish that the Vessel was unseaworthy and that the unseaworthiness was causative of the grounding, remained good law.

The Judge cited the usual test of seaworthiness set out in the Cape Bonny [2018] 1 Lloyds Rep. 356: whether a prudent owner would have required the relevant defect, had he known of it, to be made good before sending his ship to sea. Under Article III r. 1 of the Hague Rules, the obligation of seaworthiness attaches “before and at the beginning of the voyage”.

Counsel for the Owners submitted that passage planning is not an aspect of seaworthiness and instead is an aspect of navigation that takes place prior to the actual passage. It was argued that a one-off defective passage plan did not amount to unseaworthiness and that a carrier’s duty was discharged by putting proper systems in place to ensure that the Master and crew can prepare an adequate passage plan before the beginning of the voyage. The Judge was unable to accept this, holding that the Vessel was unseaworthy at the commencement of the voyage by virtue of the defective passage plan. He stated that concentrating on the actions of the Owners without considering those of their servants confused the issue of seaworthiness with the non-delegable duty of due diligence.

It was held that the defect in the passage plan was causative of the Master’s decision to leave the fairway, which in turn caused the grounding.

The cargo interests argued that the Master and Second Officer’s negligence in preparing the passage plan amounted to a failure on the part of the Owners to exercise due diligence to make the Vessel seaworthy. The question then arose whether the Master and Second Officer could reasonably have prepared an appropriate passage plan with the exercise of due diligence. The Judge held that they could have done so. The Owners submitted that due diligence had been exercised because the Owners’ SMS contained appropriate guidance for passage planning. The obligation to exercise due diligence only concerned things done by the Owners in their capacity as carrier, and not by the crew in preparing the passage plan, which was a matter of navigation.

The Judge made clear that an Owner’s SMS must be adequate to secure a finding that due diligence has been exercised. It was recognised that a well-documented SMS is an important tool for defending claims based on unseaworthiness. However, it is not sufficient for an Owner to demonstrate that it has itself exercised due diligence. The non-delegable nature of due diligence means that it must be shown that the servants and agents relied upon by the Owner to make the Vessel seaworthy at the beginning of the voyage must also have exercised due diligence.

Comment

The judgment is a further demonstration that the English Courts consider the concept of seaworthiness to be an evolving obligation which is intended to develop in line with the developments in the shipping industry. As Teare J acknowledged, before the need for passage planning to be adopted by “all ships engaged on international voyages was recognised by the IMO 1999 Guidelines for Voyage Planning, it may have been the case that a prudent owner would not have insisted upon the preparation of an adequate passage plan from berth to berth. However, I am confident that by 2011 the prudent Owner would have insisted on the preparation of an adequate plan from berth to berth”. It remains to be seen whether the Court’s finding on this and other issues will be appealed and, if so, this will be a case to watch.

Significantly, the case breaks new ground and sets a new bar for seaworthiness in finding that a defective passage plan will, of itself, render a vessel unseaworthy if a prudent owner would not have sent the vessel to sea with the relevant defect. It also provides a useful reminder of the non-delegable duty of due diligence. In particular, the decision highlights that even if an owner has in place good SMS practices, the non-delegable duty of due diligence will override it and will not absolve the owner of liability if a crewmember nevertheless fails to follow it or is negligent in its application prior to commencement of the voyage.

We would also make the following observations:

1. There is no doubt that, following this judgment, the adequacy of a vessel’s passage plan will come under greater scrutiny. In light of the apparent elevation of a passage plan to a document that could render a vessel unseaworthy, some owners may give consideration to ensuring that additional checks are made on the adequacy of passage plans and may wish to consider arranging for the plans to be approved by owners’ operations team, as well as by the master prior to a vessel sailing. This may, however, be a challenge in terms of practicality and resources.
2. That said, a defective passage plan of itself will not lead to liability if the defect is not causative. The burden remains on the cargo interests or charterers to demonstrate that any defects in a passage plan are causative of any loss and a careful analysis of causation will still need to be made on a case by case basis. In this regard, it is noteworthy that it may prove important going forward that navigational experts have the requisite experience of operating and working with electronic charts.
3. We would suggest that it remains questionable whether the requirement of a berth to berth passage plan is practicable and relevant in every case. The defect in the passage plan in this case concerned the immediate departure from the load port and not arrival at the eventual discharge port. As a matter of practice, it is often the case that a vessel’s orders change during the voyage or final orders as to the discharge berth are only provided en route. In those circumstances, an issue will be whether, if a passage plan is completed during the voyage but contains a defect which is causative of a grounding, the negligent navigation defence under Article IV r. 2(a) of the Hague Rules would in fact still be available to an owner (assuming the relevant documents to complete the passage plan are on board).
4. This particular grounding occurred during a time of transition from paper to electronic charts. While it was found that the Vessel did have the means to prepare a non-defective passage plan, the requirement now to carry electronic charts may aid accurate passage planning.
5. It is noteworthy that the cargo interests argued a number of other points relating to bridge management, incompetence of the Master and fatigue. These were unsuccessful and this suggests that it remains a challenge for cargo interests to prove such issues, particularly where owners do have adequate systems in place.
6. Finally, this case also highlights the importance of obtaining witness evidence immediately after a casualty and demonstrates that witness evidence given several years after the event has little value in comparison. It also gives an insight into the Admiralty Judge’s views on and encouragement of the use of Nautical Assessors for issues of passage planning and navigation in GA cases arising from groundings.

Source: The Baltic Exchange